THE committee to negotiate Sarawak’s oil and gas disputes with Petronas is now redundant, said its chairman Abdul Karim Hamzah.

The state tourism, arts and culture minister said the five-member committee, which was formed in June, had not even met once but it was no longer necessary as Petronas has finally agreed to pay the state its 5% sales tax on petroleum products.

“The committee hasn’t been disbanded but its objectives have been overtaken by recent events,” Karim told reporters after chairing a meeting on youth development in Kuching today. 

Beside the state’s sales tax, the committee was to also negotiate Sarawak’s demand to increase oil and gas royalties from 5% to 20% and Petronas’ future role in the state’s oil and gas industry.

The national oil company agreed to pay the 5% sales tax after dropping its appeal against a suit by the Sarawak government in June.

“Payment is forthcoming. It’s more than the RM3 billion (originally calculated) with interest and penalties for late payment.

The amount is for last year’s assessment.

“Before things didn’t seem to be that easy but now with the prime minister and chief minister on the same wavelength, we are able to get our 5% sales tax quite easily,” he said.

Karim also said the committee he chairs was redundant because there were two other higher level committees formed with the same objectives regarding Sarawak’s oil and gas resources.

One was formed by the federal government in May and is jointly headed by Senior Minister Fadillah Yusof and Finance Minister Tengku Zafrul Tengku Abdul Aziz. This committee reports to Prime Minister Muhyiddin Yassin.

The other is a state working committee formed by the state government in late June and is headed by Deputy Chief Minister Awang Tengah Ali Hasan, and reports to Chief Minister Abang Johari Openg.

Karim’s committee reports to the Sarawak assembly’s consultative committee. – September 9, 2020.